Glossary

This glossary contains a list of terms and their short definitions in the context of Decentralized Finance (DeFi). These terms include definitions of key concepts, technologies, and protocols that are commonly used in the DeFi space, such as Decentralized EXchanges (DEX), Smart Contracts, and Yield Farming, Flash Loans, etc.

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  • Admin Key Risk Admin Key Risk is the risk of the master private key being compromised. An admin key, also known as an administrative key or administrator key, is a key or password that grants access to administrative functions and controls. This type of key is typically only given(...)
  • Airdrop An Airdrop is a token distribution event that acts as a reward or incentive for a project or activity. A crypto airdrop can also be a marketing tactic companies or organizations use to distribute cryptocurrency tokens to many people for free. This is typically done to(...)
  • Algorithmic Stablecoin An Algorithmic Stablecoin employs an algorithm to control its supply/demand to maintain its stability in relation to another asset. Unlike other stablecoins, which are typically backed by physical reserves of the underlying asset, algorithmic stablecoins are designed(...)
  • Annual Percentage Rate (APR) Annual Percentage Rate (APR) is the annualized interest rate without accounting for the compounding effect. The APR is intended to give borrowers a standard way to compare the rewards/costs of different deposits/loans and make informed decisions about which assets to(...)
  • Annual Percentage Yield (APY) Annual Percentage Yield (APY) is the rate of return earned in one year taking into account the effect of compounding interest. The effect of compounding allows for the earning interest on interest. The APY is calculated using a standardized formula that takes into(...)
  • Anti-Money Laundering (AML) Anti-Money Laundering refers to the activities financial institutions perform to achieve compliance with legal requirements to actively monitor and report suspicious activities. Money laundering is the process of disguising the proceeds of illegal activities as(...)
  • Application Binary Interface (ABI) An Application Binary Interface (ABI) specifies the details of how to programmatically interact with a smart contract. ABI defines a set of rules and conventions for how different programs should interact with each other, including details such as the data types and(...)
  • Application Programming Interface (API) Application Programming Interface (API) can refer to the protocol specification that allows two applications to talk to each other, as well as an implementation that is conformant. APIs specify how software components should interact with each other and defines the(...)
  • Audit An Audit refers to the process of formally verifying the validity and soundness of a smartcontract by an external professional entity. Audits typically involve a detailed analysis of the system's code, design, and implementation, as well as its security protocols and(...)
  • Automated Market Maker (AMM) An Automated Market Maker (AMM) simultaneously and programmatically posts bid and sell orders to create a market for one or more assets. AMMs use mathematical formulas to automatically determine the prices at which users can buy and sell assets, based on the available(...)
  • Back running Back running is an arbitrage trading strategy where a transaction is introduced just after another event that creates a profitable opportunity. For example, this can be to execute a buy transaction immediately after a sell order that depresses the price, or buying new(...)
  • Batch Auction A Batch Auction groups orders and executes them simultaneously at the same price. This allows the market to process a large volume of orders more efficiently, reducing transaction costs and minimizing the potential impact on prices. Batch auctions are commonly used(...)
  • Bitcoin Bitcoin is the first digital currency that decentralizes trust using the novel Proof-of-Work consensus mechanism. It was created in 2009 by an unknown individual or group of people using the pseudonym Satoshi Nakamoto. Unlike traditional currencies, which are backed by(...)
  • Bond Control Variable (BCV) Bond Control Variable (BCV) is the scaling factor at which bond prices change. A low BCV translates to a higher discount for bondholders and a lower inflation for the protocol, and vice-versa.
  • Bonding Curve A bonding curve maps the price of an asset as a function of its supply. The price of an asset is determined by a mathematical formula that takes into account the supply and demand for that asset. The idea behind a bonding curve is to provide a mechanism for automatically(...)
  • Buy and Hold Buy and Hold is a passive investment strategy where the holder keeps a long position over an extended period of time. In the context of crypto, typically the buy and hold strategy involves purchasing a cryptocurrency and holding onto it for an extended period of time,(...)
  • Carry Trade A Carry Trade is a trading strategy involving borrowing an asset at a lower interest rate and re-investing it with in an asset with higher returns. In the context of decentralized finance (DeFi), a carry trade could involve borrowing a cryptocurrency with a low interest(...)
  • Central Bank Digital Currency (CBDC) A Central Bank Digital Currency (CBDC) is a digital only fiat currency issued by central a bank that is considered legal tender. A CBDC is similar to other digital currencies, such as Bitcoin or Ethereum, in that it is a digital representation of value that can be(...)
  • Centralized Exchange (CEX) A Centralized Exchange (CEX) is service that has full custody of the assets being traded. Unlike decentralized exchanges, which operate on a peer-to-peer basis and do not require a central authority, a centralized exchange is operated by a single company or organization(...)
  • Collateral Collateral is an asset that is used as guarantee and/or as an incentive to fulfill an obligation. When taking out a loan on a DeFi platform, the borrower typically needs to provide some form of collateral to secure the loan. If the borrower fails to repay the loan, the(...)
  • Collateral Ratio Collateral ratio provides the relative maximum amount that can be borrowed for a given collateral. This ratio is an important factor to determines the safety of a loan. It is typically expressed as a percentage, and it represents the amount of collateral that a borrower(...)
  • Collateralized A collateralized asset has another, or multiple other assets, backing and securing its value. This means that the borrower puts up some form of assets, such as cryptocurrency or stablecoins, as security for the loan. If the borrower fails to repay the loan, the lender(...)
  • Collateralized Debt Position (CDP) Collateralized Debt Position (CDP) is a loan that is backed by an asset that will be liquidated if its value depreciates below a liquidation threshold. In general, a CDP is a type of loan that is secured by collateral. In the context of DeFi, this might involve using(...)
  • Composability Composability is the ability to combine various components to form a new service or product. In the context of decentralized finance, or DeFi, composability refers to the ability of various DeFi protocols and applications to be combined and connected to create new(...)
  • Compound Annual Growth Rate (CAGR) Compound Annual Growth Rate (CAGR) is a financial metric used to measure the average annual rate of growth of an investment or asset over a specific period of time. CAGR takes into account the compounding effect of returns, which makes it a valuable tool for assessing(...)
  • Cover Amount The Cover Amount is the maximum payable compensation by the insurance company when a claim is made. In general, the cover amount is the amount of collateral that is used to cover the value of the loan or other financial instrument, and it is typically expressed as a(...)
  • Crypto Twitter (CT) Crypto Twitter (CT) refers to both the community that tweets about crypto subjects and their news, discussions, reports, and drama. CT is a vibrant and active community, with users sharing news, opinions, and analysis about a wide range of topics related to(...)
  • Cryptoasset A Cryptoasset is a digital asset that is secured using cryptography and tracked via a blockchain. In the context of decentralized finance, or DeFi, cryptoassets are often used as collateral to secure loans or other financial instruments, or as the underlying asset for(...)
  • Cumulative Volume Delta (CVD) Cumulative Volume Delta (CVD) is a technical analysis tool used by traders to measure buying and selling pressure in the market. It is based on the difference between the volume of trades occurring at the bid price and the volume occurring at the ask price and can(...)
  • Custodian A Custodian is a third party that is responsible for holding and safeguarding assets on behalf of their clients. In the context of decentralized finance, or DeFi, a custodian might be responsible for holding and safeguarding assets such as cryptocurrencies or other(...)
  • Death Cross Death Cross is a technical analysis pattern that arises when a short term indicator downwards crosses a longer term indicator. A death cross in the context of decentralized finance (DeFi) refers to a bearish technical analysis pattern that occurs when the 50-day moving(...)
  • Decentralized Application (dApp) A Decentralized Application (dApp) is an algorithm that runs on distributed computer with access to a blockchain. In the context of decentralized finance, or DeFi, dApps are often used to create financial products and services that are built on top of blockchain(...)
  • Decentralized Autonomous Organization (DAO) A Decentralized Autonomous Organization (DAO) is a collective that is managed by a set of rules transparently encoded in smart contracts on the blockchain. In the context of decentralized finance, or DeFi, a DAO might be used to create and manage a decentralized(...)
  • Decentralized Exchange (DEX) A Decentralized Exchange (DEX) is a dApp that enables trading and exchanging digital assets directly without relinquishing custody of the assets. In the context of decentralized finance, or DeFi, a DEX allows users to buy and sell cryptocurrencies and other digital(...)
  • Decentralized Finance (DeFi) Decentralized Finance (DeFi) is a new financial system that enables the issuance of tokens, trading, lending, investing, and speculating in a way that is permissionless and completely distributed. DeFi is a rapidly growing area of the cryptocurrency and blockchain space,(...)
  • Decentralized In Name Only (DINO) Decentralized In Name Only (DINO) are projects that are portrayed as decentralized but in fact are not. DINO project may claim to be decentralized, but it still relies on a small group of individuals or entities to control its operations and make important decisions.(...)
  • Derivative A Derivative is a financial contract that derives its value from another asset or groups of assets. Derivatives are often used in DeFi as a way to hedge against risk or to speculate on the future price movements of an asset. They can be traded on decentralized exchanges,(...)
  • Distributed Ledger Technology (DLT) Distributed Ledger Technology (DLT) stores and provides access to a ledger in a us multiple redundant nodes. DLT allows for the decentralized storage and management of data, such as financial transactions and other records. This is different from traditional databases,(...)
  • Dollar-Cost Averaging (DCA) Dollar-Cost Averaging (DCA) is an investment strategy where an asset is purchased at regular intervals. In this type of long strategy, the volatility of the asset is smoothed across the investment timeframe. This can help to reduce the impact of volatility on the overall(...)
  • Dutch Auction A Dutch Auction starts with a high price that is progressively lowered it until a participant accepts the quoted value. This is different from a traditional auction, in which buyers bid against each other to determine the final price of the asset. In the context of(...)
  • Efficient Market Theory (EMT) Efficient Market Theory (EMT) is a doctrine whereby the price of an asset already takes in to account all information available and it reflect its true value. In other words, according to this theory, it is impossible for investors to consistently beat the market because(...)
  • ERC-20 ERC-20 defines the technical standard used to create fungible tokens on Ethereum. This standard defines a set of rules that a token must follow in order to be compatible with the Ethereum network. This includes rules for how the token can be transferred, how it can be(...)
  • ERC-721 ERC-721 defines the technical standard used to create non-fungible tokens (NFTs) on Ethereum. In the context of DeFi, ERC-721 tokens are often used to represent unique assets, such as collectible items, virtual real estate, or other digital assets that have unique(...)
  • Ether (ETH) Ether is the native cryptocurrency of the Ethereum blockchain that enables transactions and the execution of smart contracts. In the context of DeFi, ETH is used as a means of exchange and as a store of value. It is often used to pay transaction fees and to provide(...)
  • Ethereum Ethereum is an open-source blockchain that implements smart contracts enabling digital tokens and distributed applications. In the context of DeFi, Ethereum is the most widely used blockchain platform, with many DeFi protocols and applications being built on top of it.(...)
  • Ethereum Request for Comment (ERC) Ethereum Request for Comment (ERC) is a document that sets guidelines and rules for developers to follow when implementing new features. ERCs are used to formally describe new standards and suggestions for the Ethereum platform. In the context of DeFi, ERCs is used(...)
  • Exchange An exchange is a service that enables participants to buy, sell, and trade one asset for another. In the context of DeFi, a crypto exchange is a decentralized platform that allows users to trade cryptocurrencies and other digital assets in a transparent and secure way,(...)
  • Exit Liquidity Exit Liquidity typically describes a buyer of worthless assets from someone who is knowingly disposing of junk. Exit liquidity, with its origins in traditional finance, takes on a distinct DeFi interpretation, often alluding to unsuspecting retail investors who, while(...)
  • Exit Scam An Exit Scam refers to a fraudulent scheme where a team behind project disappears with investors' funds after building up trust and accumulating a substantial amount of capital. Exit scams usually involve anonymous teams and promises of unrealistic returns, and although(...)
  • Exposure Exposure refers to the amount of money or any other asset an investor stands to lose from a position. In the context of DeFi, refers to the amount of risk that a user is taking on by using a particular DeFi application or protocol. For example, if a user takes out a(...)
  • Externally Owned Account (EOA) Externally Owned Account (EOA) are accounts that are controlled by an entity that is not on-chain. EOA is a term used on the Ethereum blockchain to refer to a type of account that is controlled by a private key. In the context of DeFi, an EOA is an account that is(...)
  • Factory Smart Contract A Factory Smart Contract is an on-chain smart contract that is able to spawn other new smart contracts. In the context of DeFi, a factory smart contract is often used to create new instances of a particular DeFi protocol or application. For example, a lending protocol(...)
  • Flash Loan A flash loan is an unlimited uncollateralized loan of that takes place within one transaction. These loans involve very limited risk since they fail to be granted if the transaction does not complete with all the funds plus associated fees are returned(...)
  • Fully Diluted Valuation (FDV) Fully Diluted Valuation (FDV) is calculated by multiplying the total supply of tokens (those existing plus those yet to be released) by the current price of a single token.The concept of FDV is important for investors and market analysts because it gives a sense of the(...)
  • Fundamental Analysis (FA) Fundamental analysis (FA) measures the value of an asset by evaluating its Intrinsic value based on its financial situation and current market and economic conditions. Fundamental analysis is a method of evaluating a security, such as a stock, bond, or cryptocurrency, by(...)
  • Funding Rates (FR) A Funding Rate is a small percentage of the position's value that pay to (or receive from) counter-parties on the other side of the trade.Generally, shorts pay longs if the trend is up, and longs pay shorts if the trend is down.
  • Futures Contract A Futures Contract is an agreement to buy or sell an asset for a specified price at a predefined future date. In the context of decentralized finance (DeFi), a futures contract is a smart contract that allows users to enter into a futures contract on a decentralized(...)
  • Gas Gas is the resource needed to perform computations on the Ethereum Virtual Machine (EVM). These operations can involve simple ETH transfers as well as executing complex smart contracts. When a user sends a transaction or interacts with a DeFi application, they must pay a(...)
  • Hold On for Dear Life (HODL) Hold On for Dear Life (HODL) is a meme that refers to the Buy and Hold strategy involving Bitcoin. The term originated from a misspelling of the word "hold" in a Bitcoin forum post from 2013, and has since become a popular meme in the crypto community. In the context(...)
  • Hyperstructure A Hyperstructure describes a set of crypto protocols that run together, continuously, and autonomously, without maintenance and intermediaries. In a DeFi hyperstructure, different protocols and applications are connected and interoperate with each other, allowing users(...)
  • Impermanent Loss (IL) Impermanent loss arises when the price ratio of the two assets in an AMM pool diverges from the price ratio at the time of your initial deposit.The term "impermanent" loss refers to the fact that this loss is temporary and can be recovered if the price ratio of the two(...)
  • Implied Volatility (IV) Implied Volatility (IV) is an estimation of how much the market expects the price of the underlying asset to fluctuate in the future. A high number suggests a large deviation from the current price is likely, and vice-versa.IV is expressed as a percentage and represents the(...)
  • Index An index represents a group of assets, and its value is derived from the sum of all these assets. An index can be used to track the performance of a specific market, such as the performance of all DeFi protocols, or to track the performance of a specific type of asset,(...)
  • Inflation Inflation is the rate at which the value of an asset is changing in relation to the services or goods it can be exchanged for. Positive inflation occurs when the supply of money in an economy increases faster than the demand for goods and services, leading to a decrease(...)
  • Initial DEX Offering (IDO) Initial DEX Offering (IDO) is when a project launches a token using a decentralized exchange. An IDO is similar to an Initial Coin Offering (ICO), but instead of being launched on a centralized exchange, the token is launched on a DEX. IDOs have become a popular way(...)
  • Initial Exchange Offerings (IEO) Initial Exchange Offerings (IEO) is when a cryptocurrency exchange oversees the token sale. An IEO is a type of fundraising event in which a new cryptocurrency or token is launched on a centralized exchange. IEOs are similar to Initial Coin Offerings (ICOs), but instead(...)
  • Know Your Customer (KYC) Know Your Customer (KYC) is a compliance requirement to identify and verify account holders to ensure they are not involved in illegal activities, such as money laundering or terrorist financing. In the context of crypto and decentralized finance (DeFi), KYC is typically(...)
  • Layer 2 (L2) Layer 2 refers to a protocol built on top of an existing blockchain, known as Layer 1 (L1), with the primary purpose of enhancing scalability and speed by trading off some security. L2 solutions are particularly prominent in the Ethereum ecosystem, where high transaction(...)
  • Leverage Leverage refers to the use of debt to amplify the returns of an investment. In the context of crypto and decentralized finance (DeFi), leverage is often used by traders to increase their buying power and potentially earn larger returns on their investments. For(...)
  • Liquidation Penalty A Liquidation Penalty is a value a borrower has to pay when their collateral falls below the minimum collateral level. In the context of crypto and decentralized finance (DeFi), liquidation penalties are often charged by lending protocols when a borrower is unable to(...)
  • Liquidity Pool A Liquidity Pool is a store of tokens that facilitate trading, lending, insurance, and other fundamental aspects of DeFi. In the context of crypto and decentralized finance (DeFi), a liquidity pool is a collection of cryptocurrencies or other digital assets that is used(...)
  • Liquidity Pool Aggregator A Liquidity Pool Aggregator combines liquidity from various pools and enables the optimization of both pricing and market depth for more efficient trading. In the context of crypto and decentralized finance (DeFi), a liquidity pool aggregator is a platform that enables(...)
  • Liquidity Risk Liquidity Risk describes the probability of not being able to efficiently buy or sell an asset due to diminished market liquidity. In the context of crypto and decentralized finance (DeFi), liquidity risk is the risk that a particular asset or investment will not have(...)
  • Margin Margin is the collateral an investor has to deposit with an asset lender to cover his risk of loss. In the context of crypto and decentralized finance (DeFi), margin is often used by lending protocols and margin trading platforms to secure loans and facilitate leveraged(...)
  • Margin Call A Margin Call is a financial event where the lender asks the borrower for additional margin in order to prevent the liquidation of his existing collateral due to minimum collateral requirements. In the context Decentralized Finance (DeFi), a margin call is often issued(...)
  • Margin Maintenance Requirement (MMR) Margin Maintenance Requirement (MMR) is minimum collateral required to keep the leveraged position open. This value can also be derived as the difference between the liquidation price and the price at which the margin in a leveraged position is worth zero. MMR is(...)
  • Margin Trading Margin Trading is the practice of using leveraged collateral in order to multiply potential returns (or losses). In the context of crypto and decentralized finance (DeFi), margin trading is a popular way for traders to use leverage to increase their potential returns on(...)
  • Maximal Extractable Value (MEV) Maximal Extractable Value (MEV) is the value that can be derived by inserting, reordering, censoring, or frontrunning transactions before they are mined. MEV is often used to describe the potential profits that can be earned by exploiting inefficiencies or arbitrage(...)
  • Melt-Up A melt-up happens when the price of an asset rises rapidly mainly due to investor fear of missing out. These rapid and price rises of an asset are often followed by a sharp decline in the price of the asset, as the unsustainable rise in prices leads to a correction. They(...)
  • Metaverse A Metaverse is digital virtual space that recreates aspects of the real-world. In the context of crypto and decentralized finance (DeFi), the metaverse refers to the growing ecosystem of virtual and augmented reality technologies and applications that are being built on(...)
  • Mint Mint refers to the process of issuing new tokens using smart contracts. In the DeFi ecosystem, minting typically involves using smart contracts to issue new tokens on a blockchain, typically in exchange for other cryptocurrencies or assets. Minting is an important(...)
  • Money Market Money market refers to a segment of the financial market where short-term borrowing and lending of funds occur. t is a marketplace where highly liquid and low-risk financial instruments with short maturities are traded. The purpose of the money market is to facilitate(...)
  • Net Asset Value (NAV) Net Asset Value (NAV) company's total assets minus its total liabilities
  • NFT Marketplace An NFT (Non-Fungible Token) marketplace is an online platform where participants to mint, sell, buy, and showcase NFTs. Here's how an NFT marketplace typically works: Creation: Artists, creators, or collectors can create NFTs by minting them on a blockchain. This(...)
  • Nonce A Nonce means number only used once. In cryptography this is a random number that helps met a certain requirement. In crypto, this random or arbitrary number that is generated for each transaction in order to ensure the uniqueness of the transaction. This is an important(...)
  • Open Interest (OI) Open interest (OI) is the total number of outstanding contracts or positions that exist for a particular instrument, such as a futures or options contract.It reflects the number of active buyers and sellers in the market and can be used as an indicator of market sentiment(...)
  • Option An Option is the right to buy or sell an asset at for a predefined price at a particular date. In the context of decentralized finance, an option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a(...)
  • Option Skew Skew refers to the uneven pricing of a put and call options with the same expiration date.A positive skew means that put options are more expensive than call options, indicating that market participants are willing to pay a premium to hedge against the downside risk, while(...)
  • Oracle An Oracle is a scheme that bridges between on-chain smart contracts and off-chain data. For example, weather data, stock and other financial data, etc. In the context of decentralized finance, an oracle is a piece of software or a service that provides external data to a(...)
  • Order book An Order book contains a list of buy and sell orders with their associated price and quantity. In the context of cryptocurrency and decentralized finance, an order book is a record of pending orders for a particular asset that are placed on a blockchain or decentralized(...)
  • Other People's Money (OPM) Other People's Money (OPM) typically refers to managing and investing someone else's money. OPM is a term used in the context of Decentralized Finance (DeFi) to refer to the practice of using borrowed funds to increase one's potential returns on an investment. This is(...)
  • Over Collateralized An Over Collateralized asset is one that has been borrowed against another that is worth more. In the context of decentralized finance (DeFi), over collateralized refers to a situation where an asset is used as collateral for a loan, and the value of the collateral is(...)
  • Peer-to-Peer (p2p) Peer-to-Peer (p2p) is an architecture that allows every peer to transact with any other peer directly without the need for any intermediaries. In the context of Decentralized Finance, p2p networks are often used to facilitate the transfer of value or information between(...)
  • Perpetuals (PERPs) Perpetual contracts are a type of financial derivative that allow traders to invest, hedge, or speculate on the future price of an asset without owning the underlying asset.These contracts have no expiry date and can be held indefinitely, with the contract's value being(...)
  • Price Discovery Price Discovery is a process for determining the price of an asset through the interactions of supply and demand. In the context of cryptocurrency and decentralized finance, price discovery refers to the process by which buyers and sellers come together to determine the(...)
  • Priority Gas Auctions (PGA) Priority Gas Auction (PGA) is a mechanism used to determine the order in which transactions are included in a block and executed. In some blockchain networks, miners have the discretion to choose the order of transactions within a block. This discretion creates an(...)
  • Proof of Authority (PoA) Proof of Authority (PoA) is a consensus mechanism that uses pre-selected trusted validators to certify transactions and add them to the blockchain. Because of its centralized nature computations can be done faster and more efficient when compared to Proof-of-Work (PoW)(...)
  • Proof of Stake (PoS) Proof of Stake (PoS) is a consensus mechanism where participants need to prove they have a stake in order for their claim, or state, to be validated. In a PoS system, the likelihood of a node being chosen to validate a block is proportional to the amount of(...)
  • Proof of Work (PoW) Proof of Work (PoW) is a consensus mechanism where participants need to prove they have performed some work, or computation, in order for their claim, or state, to be validated. It is called "Proof of Work" because it requires users to perform a certain amount of(...)
  • Protocol A Protocol is a set of guidelines and rules and that govern how a system should operate. In the context of Crypto and Decentralized Finance (DeFi), a protocol is a set of rules that defines how transactions are processed, validated, and recorded on the(...)
  • Protocol Controlled Value (PVC) Protocol Controlled Value (PVC) is the amount of value the protocol owns and controls. PVC is often used to measure the size and growth of a DeFi protocol or dApp, and it can be a useful metric for evaluating the success and potential of a particular protocol or(...)
  • Protocol Owned Liquidity (POL) Protocol Owned Liquidity (POL) refers to tokens owned by the protocol for the purpose of being used in exchanges. Liquidity refers to the amount of assets, such as crypto tokens, that are available to be traded within a market. In the context of DeFi, POL refers to(...)
  • Rebalance Rebalance is the process of buying or selling various assets in a portfolio in order to achieve or maintain a certain level of return or/and risk. Rebalancing is an important concept in DeFi, as it can help users to manage their portfolio and ensure that it remains(...)
  • Rug Pull A "rug pull" refers to a type of scam or fraudulent activity where the team behind a cryptocurrency, token, or DeFi project abruptly withdraw all their funds from the project's liquidity pool, leaving investors with worthless assets. This term is particularly common in(...)
  • Satoshi Satoshi refers to Satoshi Nakamoto, the pseudonymous of the creator of Bitcoin. When used a quantity, it can also mean the smallest unit of the Bitcoin currency (0.00000001 Bitcoin). In the context of decentralized finance (DeFi), the term Satoshi is often used to refer(...)
  • Short covering Short covering involves buying back an asset to close out a short position. When an investor sells an asset short, they borrow the asset from another investor and sell it on the market, with the hope that the price of the asset will go down. If the price of the asset(...)
  • Short squeeze Short squeeze arises when short sellers rush to close their short positions resulting in further price increases. When an investor sells an asset short, they borrow the asset from another investor and sell it on the market, with the hope that the price of the asset will(...)
  • Slippage Slippage is the difference between the expected execution price and the actual price due to reduced liquidity. In the context of decentralized finance (DeFi), slippage refers to the difference between the expected price of a DeFi trade and the actual price at which the(...)
  • Smart Contract A Smart Contract is an algorithm that runs and operates on a blockchain when predetermined conditions are met. Smart contracts are an important part of decentralized finance (DeFi), as they allow for the automation of complex financial transactions and the creation of(...)
  • Spot price A Spot Price is the current market price for buying or selling an asset with immediate effect. In the context of decentralized finance (DeFi), the spot price refers to the current market price of a DeFi asset, such as a cryptocurrency or a token. The spot price is an(...)
  • Stablecoin A stablecoin is a crypto asset that is designed to keep a constant exchange rate in relation to another asset or basket of assets. In the context of Decentralized Finance (DeFi), stablecoins are often used as a means of storing and transferring value within the DeFi(...)
  • Staking Staking refers to locking up an asset to earn interest or other rewards. In the context of decentralized finance (DeFi), staking refers to the process of earning rewards by holding and supporting the network of a particular DeFi protocol or application. To participate(...)
  • State Root State Root is a hash that represents the world state of all the accounts. The state root is a value that is used to represent the current state of a blockchain. In the context of decentralized finance (DeFi), the state root is a value that is used to represent the(...)
  • Stop Hunting Stop hunting is a trading strategy that forces market participants out of their positions by pushing the price of an asset to the point where a stop-loss order is triggered. A stop-loss order is an order to buy or sell an asset when it reaches a certain price, and it is(...)
  • Stop Loss (SL) Stop Loss refers to a risk management technique used by traders and investors to mitigate potential losses on their positions by setting a price at which a trade is executed automatically. The purpose of a stop loss is to limit the potential downside of a trade or(...)
  • Technical Analysis (TA) Technical analysis (TA) is a methodology for evaluating and forecasting the direction of prices through the study of past market data, primarily price and volume. The goal of technical analysis is to identify patterns and trends that can indicate future activity.(...)
  • Technical Risk Technical Risk is the probability of loss due to hacks, bugs, or other technical issues that may arise. In the context of decentralized finance (DeFi), technical risk refers to the potential for losses or other adverse effects that may result from technical issues or(...)
  • Time Weighted Average Price (TWAP) Time Weighted Average Price (TWAP) represents the average price of an asset over a specified time. In the context of decentralized finance (DeFi), TWAP refers to the average price of a DeFi asset, such as a cryptocurrency or token, over a specific period of time. TWAP(...)
  • Token A Token is an entry on a blockchain that can represent a cryptocurrency or any other type of physical or digital asset. In the context of decentralized finance (DeFi), a token is a digital asset that is used to represent value within a DeFi protocol or(...)
  • Token Generation Event (TGE) A Token Generation Event (TGE) is when a token is launched and its initial allocations distributed. TGEs are an important part of the DeFi ecosystem, as they provide a way for new DeFi protocols and applications to raise funds and gain support from the community. During(...)
  • Token Rebase A Token Rebase is an adjustment (increase or decrease) that is made to the circulating supply of a token. Token rebases are an important part of the crypto ecosystem, as they can provide a way for the supply of a particular token to remain in line with a desired set of(...)
  • Tokenize Tokenize refers to the process of representing an asset as a token so that its ownership can be stored, transferred, and processed using a blockchain. In the context of decentralized finance (DeFi), tokenization refers to the process of representing a physical or digital(...)
  • Total Value Locked (TVL) Total Value Locked (TLV) can represent the total value of assets that have been deposited into an ecosystem, a project, or simply to a smart contract. TVL is an important concept in DeFi, as it provides insight into the popularity and adoption of a particular DeFi(...)
  • Trading Pairs Trading Pairs are assets that can be inter-exchanged directly without using an intermediate asset. In the context of decentralized finance (DeFi), trading pairs refer to combinations of two DeFi assets that are traded on a DeFi exchange or platform. Trading pairs are(...)
  • Traditional Finance (TradFi) Traditional Finance (TradFi) refers to a capital market structure that depends on centralized institutions and intermediaries like banks, brokers, and clearinghouses to provide access to financial services and products. TradFi and DeFi have many differences, and they(...)
  • Value Staked Value Staked is the number of tokens a participant supplied for the purpose of staking. Staking is a process by which users can earn rewards for locking up their tokens, and value staked is a measure of the total value of assets that are being used to participate in(...)
  • Variant Perception Variant Perception is a contrarian view an investor holds that is substantially different from the market consensus. In the context of decentralized finance (DeFi), variant perception refers to a situation in which a DeFi trader or investor has a different view of a(...)
  • Volume Weighted Average Price (VWAP) Volume Weighted Average Price (VWAP) represents the average price of an asset with the price weighted according to the volume of each trade over a specified period of time. VWAP is an important concept in trading, as it can provide insight into the performance and value(...)
  • Wallet A Wallet is an interface that allows crypto users to store, track, and transact their digital assets Wallets are an essential part of the crypto ecosystem, as they provide a way for users to securely hold and manage their DeFi assets. There are several different(...)
  • Wrapped Token (WT) A Wrapped Token (WT) is a crypto token that represents and mimics the value of another token. Typically a token is locked within a smart contract of a certain chain and a wrapped token is created using another smart contract on a different blockchain network. Wrapped(...)
  • Yield Farming (YF) Yield Farming (YF) is a strategy that involves depositing assets in exchange for rewards. An effective YF strategy allocates assets to maximize their yield while reducing the risk of loss. These farming deposits can be used to: enable staking, grant(...)